Long Run Neutrality and Superneutrality of Money: Aggregate and Sectoral Tests for Nicaragua

Frederick Wallace and Gary L. Shelley
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Gary L. Shelley: East Tennessee State University

Macroeconomics from University Library of Munich, Germany

Abstract: The Fisher-Seater (1993) methodology is applied to Nicaraguan data to test for long run neutrality and superneutrality of money. Real GDP and real output in six broadly defined sectors are I(1), while the money supply is I(2). These orders of integration imply that money is neutral with respect to both aggregate and sectoral output. However, superneutrality is rejected for real GDP as well as for all six sectors. Results of the superneutrality tests suggest that inflation driven by money growth imposed real costs on the private sector while the government sector

Keywords: Monetary neutrality; superneutrality; Nicaragua (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004-02-02
New Economics Papers: this item is included in nep-mon
Note: Type of Document - pdf; prepared on Windows2000; pages: 27
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0402004

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